On Thin Ice (Another Slippery Lawsuit for LB)

It seems when I came across a lawsuit related to the mis-development of the SUPERBLOCK, I was just seeing the tip of the litigation iceberg. I argued in that post that it seems Long Beach is drowning in litigation, little did I know just how true that was. Today, I’ll highlight yet another case featuring such hits as breach of contract, wrongful eviction, and defamation against the City.

For a little background (and something you can do at home), while looking for more lawsuits that were linked to the SUPERBLOCK, I started searching this website. This handy-dandy website lets you search for all sorts of litigation, and gives you easy to download copies of all applicable court documents, for free. When one of the results against LB came up with the plaintiff called “Arena of Long Beach,” I was interested. A few clicks and some reading and WOW, yet another nasty lawsuit that the City government is facing, that I haven’t heard a peep about – even though there was a filing in June and the next appearance is set for December.

In brief, this lawsuit pits the former renter of the Long Beach ice rink, Bernard Shereck, against the City Manger, Charles Theofan, and the City itself. In 2009 evictions went out, and now the former renter has taken the City to court, and has had decisions go in his favor in the case’s first two motions.

I’ll let Newsday summarize:

The lawsuit contends that the city’s eviction attempt breaks an existing lease. A 10-year lease set to expire last August included a tenant option to extend it for five years. Klein said Shereck was not entitled to an extension because he had not fulfilled the lease’s terms – namely, he had not paid the annual $175,000 rent stipulated in the original.

After Shereck paid his first installment in January 2007, then-City Manager Edwin Eaton and the City Council granted him a rent reprieve through July 2008 in light of the expenses incurred in fixing up the arena, the complaint states.

Then, last year, the city hired an auditor to review the tenant’s finances, including the rent obligation. In a March 2008 letter to the auditor, City Manager Charles Theofan said: “We believe the rent obligation imposed mighthave to be adjusted downward.

“We are very pleased with the programs that have been introduced at the arena, and with physical improvements that have been undertaken,” Theofan wrote. A lawyer for Shereck, Richard Cahn, said Theofan agreed last November to extend the lease for five years at an annual rent of $60,000, which Shereck has been paying. “The city has no right to evict Bernie,” Cahn said. “He’s got a lease.”

So did you get all that? Basically summarizing the court docs and Newsday, Mr. Shereck came in and took over the decaying ice rink. Because he was going to put up a bucket of his own money to improve it ($250,000), the City Manger at the time Edwin Eaton (gasp a Democrat!) waived his rent for the facility in light of the capitol he put up for the renovations.

Then when Mr. Theofan came back in 2008, and after an auditor looked over the ice rink, Mr. Theofan basically says, alright everything looks good, and here’s your five year lease extension. So, Mr. Shereck continues for about another year paying his new rent amount ($60,000 per year) and continuing to run the rink. Then on 3/31/2009, the rink gets an eviction notice, with one of the main issues being that Mr. Shereck wasn’t paying his rent. If that sounds confusing, it is.

In the amended complaint, Mr. Shereck tagged on a claim of defamation because in the media coverage that came out, Mr. Theofan is quoted as saying Mr. Shereck was being evicted because he “did not pay his rent for a year and a half amounting to about $200,000 in lost revenue for the City.” Even though Mr. Shereck seems to be able to prove he wasn’t a deadbeat and was indeed paying his rent and all was well. There were technically two evictions, the first one received all the news attention – in which Mr. Theofan was quoted saying that the issue was he didn’t pay his rent. Then days later after they dropped the first eviction they submitted a second eviction notice, but it is unclear what the reason underlining the second eviction was and how it differs from the first (still for non-payment of rent or was it something else?)

And the next twist – selective amnesia. As these court proceedings take forever, it wasn’t until January of 2011 when Mr. Theofan and the City’s Corporate Counsel Corey Klein were deposed. During that, both City officials “could not recall discussing the moratorium” with the reporters of Newsday and the Herald, even though they are quoted in both of those papers.

The City’s Parks Commissioner who took over the rink and runs the separate and private hockey league to this day, Joseph Brand, was also scheduled to be deposed, but the City attempted to block it. The City claimed, “city representatives already had sufficient knowledge of the Arena’s eviction” so he shouldn’t have to talk to the courts. What they’re saying is the guy that has been running the rink in the meantime and the head of the recreations department at the time of the eviction shouldn’t have to talk about what he knows because, hey trust us, other people already told you what he knows. Yea, that doesn’t make too much sense to me either.

In the latest motion I could find, dated June 7, 2011, the Honorable Stepehen Bucaria called shenanigans on that, and said the plaintiff (Mr. Shereck) had every right to request Mr. Brand to be deposed (with a few caveats protecting “official” communications). Currently, the next court appearance is scheduled for 12/15/2011.

So what does all this mean? With the ice rink that was neglected since built in 1974, a former hockey player came in, invested a massive amount of money, and reportedly began to turn a profit. At some point it appears the City Manger, Charles Theofan decided Mr. Shereck had violated something, and required his eviction.

What’s extra interesting is that in March of 2011, the City approved (3-2) a new lease agreement for Building Fitness Performance, a father/son Lido Beach based-company. Based on the play by play in this article, the City Council meeting turned into a brawl between at least two members of the City Council (the article cites Mr. Sofield and Mr. Fagen).

In 2009 when the eviction was going through, Corporate Counsel Klein said that one of the reasons was because, “The city itself can provide better services.” That’s a reasonable position for the City to take, but why was that only true in 2009, but now in 2011, the City thinks they should again lease out the rink? I thought the City can “provide better services”? Anyway isn’t the “free market” supposed to decide the success and failure of business and not government?

The new company, Building Fitness Performance was to be offered a lease of $22,000 per year! The previous contract, that was originally approved for a five-year extension by Mr. Theofan was worth a minimum of $60,000 per year for rent alone. In 2006 when Mr. Shereck first got the lease he was to pay $175,000 per year in rent (which was waived after he made all the improvements). Why after two years did the rent drop by two thirds? Why after six years was the rent dropped by 87%! I have no idea and none of those numbers seem pegged to reality for rent of one of the only ice rinks on the south shore of Long Island. Note: I cannot confirm if Building Fitness Performance ever actually took over the rink

I don’t particularly care about the ice rink. But, from reading through this stuff I know there are an awful lot of kids and parents that do care about the ice rink. How many of them know all of this is going on? Why during news coverage of the March 2011 decision to start a new lease with a different company is there no mention of pending litigation that could void the new lease? How much money is at stake in a lawsuit like this? How many other lawsuits are floating out there? The same way I want the beaches open so surfers can thrive, I want the ice rink to be run well without a cloud of litigation over it so little dudes can become pro hockey players.

So with a little Google-fu and checking court records and newspaper clippings, yet another case slides in front of me. What is it about Long Beach? It seems no matter where you look or who you talk to, there’s another lawsuit around the corner.

You can read the latest motion filed in June here. It actually gives a fairly good plain English account of the story.

And here’s the original complaint filed in April 2010.

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5 thoughts on “On Thin Ice (Another Slippery Lawsuit for LB)”

  1. “What is it about Long Beach? It seems no matter where you look or who you talk to, there’s another lawsuit around the corner.” > Question to the question: What seems to be the common thread here? Answer: Charles Theofan ?

  2. Shaun,

    All good points, bit here are some other facts.

    1. Whem the city seized control of the rink, who was hired as managers? Noel Henk Joe Brands cousin and Kieth Casey his good friend. All had no experience running an ice rink before. The city let go of qualified employees with over 10 years running the rink. When one former employee asked the city concil at the good and welfare portion of the meeting what there qualifications were? KIng Charles respoded we felt they were! When he pressed harder for an answer Tommy Boy tries to intimedate by say sounds like your a disgrunteld former employee.Still no answer given to the question asked.

    2. How about the long time rink employeee that does not appear onthe city payroll. How is he getting paid?

    3. As for the BP Fitness contract, their proposal that was submitted started with something like please excuse any mistakes this is the first proposal we have ever written.BP was the sole bidder. Why didnt the city reach out to the numerous ex NHL players living on LI teaching kids how to play hockey and ask them if they were interested. Tommy play is hockey guy.

    4. A principal of BP fitness just happens to be The Hockey Director of thr Arena of Long Beach.

  3. 5. How about the Recreation Commisioner and rink manager running their private youth hockey organization out of the rink the control.

    6. Why have they been paying below market rates for ice rental? They are renting to themselves.

    7, How did Joe obtain the charter to run his youth hockey team? From the arenas biggest customer Apple Core Junior Hockey. Perhaps there was a quid pro quoa deal?

    Looks like a big friends and family deal not to mention a HUGE CONFLICT OF INTEREST!

  4. Good Luck to Mr. Shereck turning this malfeasance by LB city council into a win – win. The arena debacle is exposed and people get to play hockey in their hometown arena. Here’s hoping the “good guy” gets justice when gets his day in court. From a hockey mom who knows the value of a local arena.

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